Photovoltaics: 9 Trends to Watch in 2010

Tough grading for a rough 2009 and my 2010 trends and predictions.

Although I hold the Blog accountable year round, my tradition is to look back at early year predictions and observations. As I am liberal with criticism, I won’t be grading last year’s Photovoltaics: 7 Trends to Watch in 2009 post on a curve.

For 2010, I predict a return to historical 45% plus PV installation demand growth given a reasonable and speedy German Feed-in Tariff (FiT) revision. I believe the new German center-right government will cut the Renewable Energy Law (EEG) FiT so investor rate of returns are back in the high single digit range. The spectre of a double dip recession still looms after stimulus spending wanes, but I am optimistic a long, slow recovery is underway.

In 2010, are polysilicon prices under pressure due to multiyear overcapacity and uncertain though declining FiTs? In “Poly-Si suppliers offer one-year contract quotes at US$55/kg, say Taiwan makers” at DIGITIMES (subscription may be required), Nuying Huang and Adam Hwang reported long term polysilicon supply contracts were in the $60-70 per kg (kilogram) range amid speculation regarding potential $45-50 per kg short term contracts.

Thin Film PhotovoltaicsFrom my trio of 2009 thin film PV predictions, two were achieved by OptiSolar when they both came out of the closet and failed. A clear »Second Solar« did not emerge in 2009 although Solyndra joined the leading contenders.Grade: Pass

By developing the project on disturbed private lands, eSolar distinguished themselves and navigated the labyrinth of California permitting and environmental regulations to complete the project. By contrast, eSolar’s CSP competitors are obsessed with building projects on US government lands or desert preserves. I am still concerned about CSP water requirements in arid desert locations as “Amid state’s push for solar power, water-supply worries arise” by Shaun McKinnon for The Arizona Republic discusses across the California state line.

Though I couldn’t confirm the system capacity details (1 MW versus 1 MegaWatt-hour) or the module manufacturer, I believe the largest HCPV project completed in 2009 was a 1 MW solar power plant in Taiwan. The HCPV project was a pilot program sponsored by the Institute of Nuclear Energy Research (INER). Please see “New solar power plant inaugurated” by Vincent Y. Chao for The Taipei Times.

I predict at least 30 to 50 MWp (MegaWatt-peak) of HCPV must be installed in 2010, or HCPV is destined to remain Eric Wesoff’s pet zero billion-dollar market.

Economic Outlook (was Recession Risk)On the Great Recession, I said: “My thesis is Photovoltaics and renewable energy will be leading indicators of a 2010 global economic recovery. In my opinion, the economic situation is still deteriorating and has not bottomed. Sorry, there won’t be a recovery from the recession in the second half of 2009.”Grade: Fail

I wasn’t that wrong, but most countries were out of recession on a technical basis (please see “Has the world economy turned the corner?” by Christine Oliver for the Guardian) by the third quarter of 2009 even if the recoveries are slow and jobless.

OilSo I said: “I predict oil will test $25 per barrel in 2009; oil will recover to over $100 per barrel but not until the end of 2010 or the 2011 timeframe when the economic recovery picks up.”Grade: Pass

Oil didn’t quite trade as low as $25 per barrel but it did remain below $100 per barrel in 2009. Oil had a speedy rebound after touching below $40 per barrel and stayed above $70 per barrel since the technical end of the recession. Despite the stubborn trade, I’ll predict oil will stay below $100 per barrel though 2010 anticipating the dollar to strengthen throughout the year.

PV Industry ShakeoutBoth start-ups and established manufacturers surviving 2009 will face a tougher 2010 driven by PV industry oversupply and FiT reductions. Thin film and CPV firms are most vulnerable to the shakeout. Crystalline silicon solar manufacturers will also fail and undifferentiated PV module firms occupy a precarious link in the PV value chain.

I predict the PV “take under” trend will continue as faltering or failing firms are acquired for valuations well below their venture capital or equity funding since inception. Other acquirers will bottom fish in liquidation to acquire talent, know how, patents, and equipment at closeout prices.

Any firm not benefiting from stimulus funds, government loans, or manufacturing tax credits should be on the watch list if venture capital is no longer funding them.

I predict a SunFab customer will fail in 2010.

PV IPOs (Initial Public Offerings)Instead of speculating about the usual PV manufacturing suspects, I’ll go downstream and predict SunRun, Inc. or SolarCity or both will IPO in 2010.